To what extent do fund of funds invest in hedge funds on the basis of total return and volatility as opposed to subjective factors such as how well the know the hedge fund manager, the fund managers resume, the fund managers reputation etc?

The reasons you gave are ALL important to consider before investing in a given manager. A fund of funds can use its discretion to invest in funds depending upon, among other things, their risk/return characteristics, volatility, performance track record, strategy, geographic or sector focus, and size. Furthermore, following the Madoff scandal, fund of funds are undoubtedly casting a closer look at each manager's pedigree, education, past experience, and integrity. This includes conducting extensive interviews and background checks. Lastly, factors such as fund fees, lockup provisions, and redemption terms are also emerging as important factors worth considering. Whether a fund of funds decides to weigh one factor more heavily than another depends upon the goals and objectives of that fund.